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State Street (STT)
NYSE:STT
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State Street (STT) AI Stock Analysis

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STT

State Street

(NYSE:STT)

Rating:68Neutral
Price Target:
$111.00
â–²(0.02%Upside)
State Street's robust earnings call results, demonstrating strong business momentum and strategic wins, are the most significant positive factor. Financial performance is solid but marred by high debt and negative cash flows. Valuation is reasonable, and technical indicators provide a mixed outlook.
Positive Factors
FX Trading Revenue
FX trading revenues of +27% year-over-year accounted for most of the EPS beat, driven by record quarterly FX volumes.
Organic Growth
Strong organic growth is showing through, with record institutional net inflows in Investment Management.
Negative Factors
Net Interest Income
Unchanged NII guide of 'roughly flat year-over-year' disappointed, leading to a lowered NII forecast.
Stock Performance
Despite better-than-expected results, the stock underperformed peers as investors focused on the net interest income outlook.

State Street (STT) vs. SPDR S&P 500 ETF (SPY)

State Street Business Overview & Revenue Model

Company DescriptionState Street Corporation (STT) is a prominent financial services company headquartered in Boston, Massachusetts. It operates within the financial sector, primarily focusing on providing investment management, investment research and trading, and investment servicing. Through its various subsidiaries, State Street offers a comprehensive suite of products and services including asset servicing, custody, fund accounting, and investment administration. State Street is recognized as one of the largest custodian banks and asset managers in the world, serving institutional investors such as mutual funds, pension funds, and investment managers.
How the Company Makes MoneyState Street generates revenue through several key streams, primarily its Investment Servicing and Investment Management segments. The Investment Servicing segment is the largest, providing fund accounting, custody, and related services, earning fees based on the assets under custody and administration. This includes services such as middle and back office solutions, securities lending, and foreign exchange trading. The Investment Management segment, conducted through State Street Global Advisors, offers investment management services and earns fees based on assets under management (AUM). State Street also engages in securities finance and foreign exchange trading, contributing to its revenue. Additionally, the company benefits from strategic partnerships and collaborations with other financial institutions to expand its service offerings and geographic reach.

State Street Key Performance Indicators (KPIs)

Any
Any
Asset Under Management
Asset Under Management
Measures the total value of assets managed, indicating the company's scale, market influence, and potential for fee-based revenue growth.
Chart InsightsState Street's Assets Under Management (AUM) have shown a strong recovery and growth trajectory since 2022, reaching record levels by the end of 2024. This growth aligns with the company's recent earnings call, which highlighted significant new business wins and increased management fees. However, the earnings call also noted challenges such as net outflows in investment management and an uncertain operating environment. Despite these challenges, the company's robust financial performance and strategic wins suggest resilience and potential for continued growth in AUM.
Data provided by:Main Street Data

State Street Earnings Call Summary

Earnings Call Date:Jul 15, 2025
(Q2-2025)
|
% Change Since: 0.86%|
Next Earnings Date:Oct 21, 2025
Earnings Call Sentiment Positive
State Street demonstrated strong financial performance and business momentum with record AUM, significant new business wins, and an improved full-year outlook. Despite challenges with repositioning charges and decreased NII, the company's strategic initiatives and capital returns paint a largely positive picture.
Q2-2025 Updates
Positive Updates
Record AUM and Positive Business Momentum
State Street surpassed $5 trillion in assets under management (AUM) for the first time, with quarterly net inflows over $80 billion. The company continues to gain market share in the U.S. low-cost ETF market segment.
Strong Financial Performance
Reported earnings per share (EPS) reached $2.17, with an 18% year-over-year increase in EPS. Fee and total revenue increased by 12% and 9% year-over-year, respectively, excluding notable items.
Significant Sales and Operational Achievements
State Street reported securing over $1 trillion in new AUC/A asset servicing wins in Q2 2025. Record FX trading volumes and strong security finance revenues were also noted.
Improved Full Year Outlook
State Street improved its full-year fee revenue growth outlook to 5% to 7% from the previous 3% to 5% due to strong business momentum.
Capital Return and Dividend Increase
State Street announced its intention to increase its quarterly per share common stock dividend by 11% to $0.84, subject to board approval, following a strong performance in the Federal Reserve stress test.
Negative Updates
Expenses and Repositioning Charges
Expenses increased by 6% year-over-year, excluding notable items, driven by higher performance and revenue-related costs and currency translation. A $100 million repositioning charge was noted, associated with severance for 900 employees.
Notable Items Impact
Notable items totaled $138 million pretax, affecting EPS by $0.36 per share, primarily due to repositioning charges and a rescoping of an alpha client contract.
Challenges in NII and Deposit Balances
Net interest income (NII) was down 1% year-over-year due to lower average short-end rates and changes in deposit mix. Noninterest-bearing deposit balances decreased by $1 billion sequentially.
Company Guidance
During State Street Corporation's Second Quarter 2025 earnings call, the company provided robust guidance and highlighted its financial metrics. The report revealed that earnings per share for the quarter were $2.17, slightly up from $2.15 in the previous year, while excluding notable items, EPS rose 18% year-over-year to $2.53. Total revenue increased by 9%, and fee revenue by 12% compared to the previous year, both excluding notable items. The firm achieved a nearly 30% pretax margin and a 19% return on tangible common equity. State Street reported strong business momentum with over $1 trillion in new AUC/A asset servicing wins and $145 million in new servicing fee revenue. The company's assets under management (AUM) exceeded $5 trillion for the first time, with quarterly net inflows surpassing $80 billion. Additionally, the firm saw record FX trading volumes and significant year-over-year increases in FX trading and security finance revenues. State Street's capital return for the second quarter was over $500 million, contributing to over $800 million year-to-date, and they announced an intention to increase their quarterly common stock dividend by 11% to $0.84. The company maintained a strong focus on operational efficiency, achieving over $1 billion in expense savings over the past three years, with plans to increase this to over $1.5 billion by year-end 2025.

State Street Financial Statement Overview

Summary
State Street exhibits strong profitability and efficient operations with high profit margins. However, high debt levels and negative cash flows pose significant risks that need to be addressed for long-term sustainability.
Income Statement
65
Positive
State Street's income statement shows a solid gross profit margin of 99.2% for TTM, indicating efficient cost management. The net profit margin has improved to 22% in the TTM from 20.8% in 2024, reflecting enhanced profitability. Revenue growth is modest with a 0.9% increase in the TTM period. However, EBIT margin at 25.4% is strong, and there's a notable recovery from the negative EBIT recorded in 2024.
Balance Sheet
70
Positive
The balance sheet reflects a stable equity position with an improving equity ratio of 7.2% in the TTM. The debt-to-equity ratio is relatively high at 0.93, posing a potential risk, although it has decreased from 1.31 in 2024. Return on equity is favorable at 10.7% for the TTM, indicating solid returns for shareholders.
Cash Flow
50
Neutral
State Street's cash flow situation is challenging with a negative free cash flow of $6.54 billion in the TTM, although there is slight improvement from $14.14 billion negative in 2024. Operating cash flow is negative, suggesting cash generation issues. The operating cash flow to net income ratio is also unfavorable, indicating reliance on non-operational cash sources.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue21.97B18.37B13.67B12.03B12.07B
Gross Profit12.84B11.90B12.11B12.06B11.61B
EBITDA4.00B3.20B4.48B4.73B4.41B
Net Income2.69B1.94B2.77B2.69B2.42B
Balance Sheet
Total Assets353.24B297.26B301.45B314.62B314.71B
Cash, Cash Equivalents and Short-Term Investments62.04B48.57B44.55B183.39B179.47B
Total Debt33.11B21.50B17.09B13.60B17.79B
Total Liabilities327.91B273.46B276.26B287.26B288.51B
Stockholders Equity25.33B23.80B25.19B27.36B26.20B
Cash Flow
Free Cash Flow-14.14B-126.00M11.22B-7.52B2.97B
Operating Cash Flow-13.21B690.00M11.95B-6.71B3.53B
Investing Cash Flow-39.48B12.74B6.82B-2.17B-65.53B
Financing Cash Flow51.79B-13.35B-18.43B9.05B62.17B

State Street Technical Analysis

Technical Analysis Sentiment
Positive
Last Price110.98
Price Trends
50DMA
101.60
Positive
100DMA
93.97
Positive
200DMA
94.25
Positive
Market Momentum
MACD
2.47
Positive
RSI
64.34
Neutral
STOCH
93.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STT, the sentiment is Positive. The current price of 110.98 is above the 20-day moving average (MA) of 108.14, above the 50-day MA of 101.60, and above the 200-day MA of 94.25, indicating a bullish trend. The MACD of 2.47 indicates Positive momentum. The RSI at 64.34 is Neutral, neither overbought nor oversold. The STOCH value of 93.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STT.

State Street Risk Analysis

State Street disclosed 38 risk factors in its most recent earnings report. State Street reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

State Street Peers Comparison

Overall Rating
UnderperformOutperform
Sector (68)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$23.65B12.1819.47%4.67%6.51%4.52%
80
Outperform
$11.18B16.9130.06%1.09%10.60%40.74%
78
Outperform
$69.75B15.1111.75%1.94%7.41%51.70%
74
Outperform
$25.05B14.6113.47%2.33%3.44%16.76%
68
Neutral
$31.56B12.4010.94%2.74%13.08%67.88%
68
Neutral
$17.10B11.449.70%3.58%11.11%-4.78%
64
Neutral
$13.01B35.842.84%5.14%7.02%-60.38%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STT
State Street
110.98
28.38
34.36%
BK
BNY
99.97
35.77
55.72%
BEN
Franklin Resources
24.72
3.01
13.86%
SEIC
SEI Investments Company
89.79
23.68
35.82%
TROW
T Rowe Price
107.56
0.90
0.84%
NTRS
Northern
128.76
41.99
48.39%

State Street Corporate Events

Business Operations and StrategyFinancial Disclosures
State Street Reports Strong Q2 2025 Financial Results
Positive
Jul 15, 2025

On July 15, 2025, State Street reported its second-quarter 2025 financial results, highlighting a record $49 trillion in assets under custody and administration and $5 trillion in assets under management. The company achieved a 6% increase in diluted earnings per share and an 11% increase in total fee revenue compared to the previous year, demonstrating strong financial performance and strategic execution amid market volatility. The results underscore State Street’s robust operational foundation and its focus on delivering long-term growth and value for shareholders.

The most recent analyst rating on (STT) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on State Street stock, see the STT Stock Forecast page.

Executive/Board ChangesShareholder Meetings
State Street Shareholders Vote on Key Matters
Neutral
May 19, 2025

At the Annual Meeting on May 14, 2025, State Street shareholders voted on several key matters, including the election of eleven directors and the approval of an advisory proposal on executive compensation. The meeting also saw the ratification of Ernst & Young LLP as the independent registered public accounting firm for 2025. However, two shareholder proposals, one for a policy requiring an independent board chair in the next CEO transition and another for a report on worker transition and community fairness in its finance strategy, were not approved.

The most recent analyst rating on (STT) stock is a Hold with a $90.00 price target. To see the full list of analyst forecasts on State Street stock, see the STT Stock Forecast page.

Executive/Board Changes
State Street Appoints John F. Woods as CFO
Neutral
Apr 30, 2025

On April 30, 2025, State Street Corporation announced the appointment of John F. Woods as Chief Financial Officer, effective by August 25, 2025. Woods, who has extensive experience in finance leadership roles at Citizens Financial Group and MUFG, will replace interim CFO Mark R. Keating. The appointment includes a comprehensive compensation package for Woods, reflecting his transition from Citizens and aligning with State Street’s executive compensation framework.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 16, 2025